The Department of Internal Affairs (DIA), one of New Zealand's three anti-money laundering regulators, has issued a formal warning to real estate agent Property Brokers Ltd but isn't alleging the firm is actually involved in money laundering or the financing of terrorism.
It's the first formal warning issued to a real estate agent under the Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Act, which has applied to real estate agents since 2019.
The DIA says Property Brokers has failed to meet several AML/CFT obligations relating to the establishment, implementation and maintenance of their AML/CFT programme and the hiring and training of compliance staff. The firm also failed to have adequate policies, procedures and controls for monitoring compliance or to follow guidance material from AML/CFT supervisors, the DIA says.
“Real estate is a high-value asset often used domestically and internationally to launder and invest criminal proceeds. Businesses have an obligation to have robust processes in place to protect them from misuse” says Mike Stone, director of DIA’s AML Group.
“Our inspection of Property Brokers Limited highlighted concerns and we have a responsibility to act on these concerns. New Zealanders need to have confidence and trust in the integrity of the New Zealand financial system.”
DIA says Property Brokers must take immediate action to rectify all areas of non-compliance and will continue to be closely monitored. Penalties for continued non-compliance could result in civil penalties of up to $200,000 for an individual, and $2 million for a body corporate. Potential criminal penalties include imprisonment for up to two years or a fine of up to $300,000 for an individual, and fines of up to $5 million for a body corporate.
DIA says its formal warning was issued on January 14.
Interest.co.nz is seeking comment from Property Brokers Ltd whose website says the firm was started by five people in 1986. Its head office is in Palmerston North and the firm says it "has been proudly looking after the property needs of provincial New Zealanders since 1986."